APM shares set to plunge after CVC pulled $1.8b deal

Daniel Newell
The Nightly
2 Min Read
APM CEO Michael Anghie will be under shareholder pressure after CVC pulled its deal for his company.
APM CEO Michael Anghie will be under shareholder pressure after CVC pulled its deal for his company. Credit: Andrew Ritchie/The West Australian

APM could be in for a rough ride when shares in the beleaguered employment and disability services group return from a trading halt after it was revealed a potential $1.8 billion buy-out deal is now dead in the water.

The Michael Anghie-led company requested the pause just before the market opened on Wednesday, disclosing that global private equity group CVC had yanked a revised $2-a-share offer first lobbed six weeks ago.

APM said it was in “receipt of a letter from CVC advising that they are unable to proceed to finalise a transaction on terms consistent with their non-binding offer as disclosed to the ASX on 28 February 2024, and the ending of CVC’s exclusivity period”.

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The announcement marks the end of a four-week exclusivity agreement and it remains unclear if CVC may return with an offer closer to its initial $1.60-a-share bid.

The takeover offer last month helped to rescue APM’s share price from freefall after a stunning sell-off by investors drove the stock to as low as 68¢ in late January.

The revised $2-a-share bid pushed the stock back above $1 and it closed trade on Tuesday at $1.63.

The re-privatisation of the global business — which employs more than 15,000 people at 1400 sites in 11 countries — would have come less than three years after its bosses and backers banked more than $600 million from investors in a disastrous share market float.

If the proposal had moved to a binding deal, it would have seen founders and management, led by executive chair Megan Wynne, retain significant ownership of the group.

But a bid at that price would have crystallised a near 44 per cent loss, excluding dividends, for those investors who bought into APM’s record WA float at $3.55 a share in November 2021.

Ms Wynne, who founded APM in 1994, and another private equity group, Chicago-based Madison Dearborn, control more than 60 per cent of the company. CVC would have emerged with 33 per cent of the company, with Ms Wynne, Mr Anghie, other senior executives and Madison Dearborn holding the balance.

APM in January confirmed a plunge in interim profit and the scrapping of its dividend.

Statutory net earnings for the six months to December 31 plunged 81.5 per cent to $7.2 million from $38.9m for the same period in 2022, despite a 31 per cent jump in revenue to $1.1b.

The result included a 35.6 per cent drop in underlying net earnings to $55m from $85.3m, in line with the company’s share-smashing market update last month.

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